Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

New rules lift GCC insurance business trebles to 18.4b  Join our daily free Newsletter

MENAFN - Khaleej Times - 09/07/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) The outlook for insurance business which has almost tripled through 2006-13 and with premiums increasing to 18.

The GCC insurance industry which has trebled its business to 18.4 billion in seven years will see its credit profile enhanced on the back of a string of regulatory measures Moody’s said on Tuesday.



These regulatory changes apart from improving the credit profile of the insurance sector will also help bring market stability and transparency by strengthening several vital aspects including capital requirements asset quality and reserve adequacy Moody’s analyst Mohammed Ali Riyazuddin Londe said.



The outlook for insurance business which has almost tripled through 2006-13 and with premiums increasing to 18.4 billion from 6.4 billion looks brighter following the introduction of a number of Takaful-specific regulations.



These regulations are credit-positive as they strengthen policyholder security directly by ensuring availability of capital or in some cases indirectly by improving capital access through requiring companies to list on the stock markets Londe said.



Also increasing mandatory insurance covers such as health unemployment motor third-party and liability have increased market awareness and is a credit positive for the market’s product diversification he said.



As the GCC economies keep diversifying away from oil and gas based revenues insurance markets have grown quickly and often aggressively. There have been varying degrees of sophistication and fierce pricing competition in many regional markets with several players determining premiums based on competitor rates rather than true risk-based underwriting the Moody’s analyst pointed out.



“This has driven volatility in underwriting results and hindered sustainable growth. Furthermore market awareness and the perception of commercial and retail consumers is negatively affected by the often constant flux in pricing variation in consistency of the services provided the quality of the products provided and claims handling” Londe said.



Regional insurance regulators are implementing enhanced regulations and guidelines to deal with the expansion in scope and type of risk covered by insurers and to address often poorly-performing markets. These reforms generally address risk-based capital or RBC and minimum asset liability management standards pricing adequacy corporate governance and transparency and introduce mandatory covers.



“We expect that the new regulations will lead to greater stability within the GCC insurance marketplace. Most of these regulations are evolutionary by way of market consultation which should help in the market’s understanding and acceptance of these albeit leading to a slightly slower implementation process” said Moody’s. It noted that the GCC insurance market’s capital adequacy has been governed by simplistic minimum capital requirements with no risk-related aspect although in most jurisdictions the minimum capital requirements are relatively high such as the UAE’s minimum capital of Dh100 million for insurers and Dh250 million for reinsurers.



This lack of risk-reflective regulatory capital needs fostered variation in the market in terms of the types and levels of risk taken on by insurers in terms of underwriting as well as investment risk with for example considerable deployment of capital into high risk assets such as real estate and equities.



Regulators in many states are now implementing RBC measures to ensure that the required capital is more closely correlated to the risks undertaken in aggregate by insurers.



Moody’s said it expects capital-centred regulatory changes to encourage insurers to focus on ensuring effective use of capital leading to improving underwriting quality and possibly reduce pricing volatility.



“We expect the increasing regulation of the insurance market will help to stabilise this volatility and further encourage market growth although additional regulatory intervention may still be required in certain scenarios to ensure well-functioning market” the ratings agency said.


 


Khaleej Times




  MENA News Headlines
 Feb 27 2015 - UAE's Etisalat posts USD13.28b revenue in 2014MENAFN
(MENAFN) UAE's Etisalat , or Emirates Telecommunications Corporation, posted USD2.42 billion net profit on revenues of USD13.28 billion in 2014, Gulf News reported.The telecommunications company said ...

 Feb 27 2015 - Oman's economic growth projected at USD75b in 2015MENAFN
(MENAFN) Oman's real gross domestic product (GDP) growth is projected at about 3.2 percent and 3.4 percent in 2015 and 2016, respectively, by global rating agency Standard & Poor's, Times of Oman ...

 Feb 27 2015 - UAE's Meraas gets USD588.8m contracts for advanced Dubai property projectsMENAFN
(MENAFN) UAE's Meraas was awarded USD588.8 million worth of contracts to Al Futtaim Carillion to build its ambitious Le Mer and Dubai Creek Waterfront schemes, The National reported.The project is ...

 Feb 27 2015 - Lebanon-born Syrian refugees risk stateless legal limboAFP
(MENAFN - AFP) Syrian refugee Yasmine Khalaf lies next to her day-old daughter Israa in a Lebanese hospital, worrying that her tiny newborn risks life without a legal identity. Israa, sleeping ...

 Feb 26 2015 - Jordan- King departs for CairoJordan News Agency
(MENAFN - Jordan News Agency) Amman Feb. 26 (Petra)- His Majesty King Abdullah II on Thursday left for Cairo on a visit to Egypt during which he will hold talks with Egyptian President Abdul Fattah ...

 Feb 26 2015 - Jordan- 688 dead 14000 injured in traffic accidents in 2014Jordan News Agency
(MENAFN - Jordan News Agency) Amman Feb. 26 (Petra)Statistics issued by the Central Traffic Department (CTD) Thursday showed that the number of traffic accidents and deaths had declined in 2014 ...

 Feb 26 2015 - Jordan- Conference on women in Sharia concludes meetingsJordan News Agency
(MENAFN - Jordan News Agency) Amman Feb.26 (Petra) - The closing session of Women in Sharia" conference which concluded meetings Wednesday evening discussed challenges faced by workers in the defense ...

 Feb 26 2015 - Jordan condemns burning of church in Jerusalem by Jewish extremistsJordan News Agency
(MENAFN - Jordan News Agency) Amman Feb. 26 (Petra)Minister of State for Media Affairs Mohammad Al Momani Thursday condemned the burning of a church by Jewish extremists in occupied Jerusalem earlier ...

 Feb 26 2015 - Jordan NATO discuss ties counter- terrorism effortsJordan News Agency
(MENAFN - Jordan News Agency) Amman Feb. 26 (Petra)Secretary-General of the Ministry of Foreign Affairs and Expatriate Affairs Mohammad Bani Yaseen and NATO Assistant Secretary General for Emerging ...

 Feb 26 2015 - Lebanese economy to grow 2.2 percent in 2015MENAFN
(MENAFN) Lebanon anticipates its economy to grow 2.5 percent in 2015, according to finance minister, after reporting a Eurobond of USD2.2 billion, the largest issue in the country's history, ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help